Bulletin

Betting on Super Bowl ads - during a downturn

More sponsors of game broadcast face bigger risk as the economy falters

By

WilliamSpain

CHICAGO (MarketWatch) -- Even as the economy sputters and the media starts to feel the pinch of ad-spending cutbacks, a 30-second commercial in this year's Super Bowl costs more than ever.

And with so many of these marketing deals wrapped up before the slowdown took hold, it is also looking like a bigger risk for some advertisers.

'It is a much harder thing to justify when so many of our customers -- and so many other people -- are feeling the pain.'
Joshua Spanier, Goodby Silverstein

One 30-second ad during Fox's Sunday broadcast can cost as much as $2.7 million, although most advertisers pay far less than that depending on when they bought the time, how much they bought and at what point in the game it's placed.

Sums like that may be small for giants like Procter & Gamble or PepsiCo, and even if they run multiple spots, it represents a blip on the radar for companies with marketing budgets of 9 or even 10 figures.

But for smaller companies, their moment on the big game's broadcast will represent their biggest single advertising investment all year. And with the grim economic outlook, the scrutiny -- both internal and external -- is going to be intense.

"It is a much harder thing to justify when so many of our customers -- and so many other people -- are feeling the pain and tightening their spending belts," said Joshua Spanier, director of communications strategy at Goodby, Silverstein & Partners, an agency owned by Omnicom Group
OMC, +0.49%

Which means there had better be measurable results -- or else.

Smaller sponsors that are below the mega-corporation tier this year include athletic-apparel specialist Under Armour Inc., Garmin Ltd.
GRMN, -4.48%
and Cars.com. SalesGenie.com, which provides databases to marketers, is using its Web site to trumpet its Super Bowl involvement.

Triggering a sell-off

Some companies can get hurt even before kick-off. Shares of Under Armour
UA, -0.21%
plunged more than 35%, from almost $44 to under $26, the day that the company announced it was buying into the game. That move -- and the company's plans to boost marketing expenses in general -- led to negative comments from analysts, which helped fuel the sell-off.

The stock has since recovered most of those losses but it is still well below its August peak of $73 and change.

"The Super Bowl has become one huge arrow in your advertising quiver, but you have to do a lot off the back of it," Spanier said. "And the way the Internet is working, there are a lot more levers and ways to exploit the event."

Among the concrete ways to measure the ad's impact are surveys of brand recall levels, traffic to Web sites featured in the ads and any post-game spike in sales. Soft measures can involve everything from tracking media coverage to trolling chat rooms to see what people are saying about your ads.

"You have to set up every single metric you can," Spanier said.

While it is virtually the only remaining nationwide entertainment spectacle in a fast-fragmenting media universe, with viewership levels double that of its nearest rival, the Super Bowl doesn't pull millions of dollars per ad just because it delivers more eyeballs than anything else.

It's about the buzz, stupid.

Early launches

Of course, advertisers in the Big Game have long used it to try and pump up their sales forces, their employees and their customers. But each year, the "water cooler" effect seems to get magnified with the rise of social-networking sites like MySpace and Facebook, along with the news media's enduring fascination with the ads.

Some advertisers, particularly the smaller ones that may buy just a single spot in the game, can and do spend as much trying to generate excitement as they do on the actual time itself.

"The Super Bowl if the premier advertising creative event of the year, but what we are finding is that a lot more spending is starting to move toward digital channels, to try and get word-of-mouth flowing," he said. "More advertisers are doing early launches and sneak previews to try and build up anticipation. It is not just about getting the eyeballs; it is about trying to drive ongoing engagement."

While final winners in the "buzz war" won't be known until after the game, Collective Intellect released a survey of blog activity for the period Dec. 28, 2007 to Jan. 27, 2008 and has come up with a few early favorites and underdogs.

"We have seen some insights already," said Don Springer, chief executive of Collective Intellect, a company that analyzes Web sites to see what people are posting online about everything from a product to a politician. "And one of them has been that GoDaddy.com is getting the same level of buzz as Anheuser-Busch
BUD, +0.37%
even though they are paying for only one TV spot."

Pushing the envelope

GoDaddy, the Internet domain company, is known for pushing the envelope when it comes to good taste. Indeed pushing and failing is the strategy.

This year, GoDaddy has made hay over having 10 spots rejected by Fox before the network finally cleared their campaign to air. Anheuser-Busch, by contrast, is the single largest Super Bowl advertiser and has long had among the most creative and talked-about executions. Fox is a unit of News Corp.
NWS, +1.64%
the parent of MarketWatch.

Another one to watch is Pepsi, a unit of PepsiCo
PEP, +1.83%
which Springer said "has done a very, very good job" and has "double the buzz" of recent years thanks to a silent ad featuring two deaf men trying to find a Super Bowl party. Corporate sibling Frito-Lay, however, is trailing the pack with its approach using music-video submissions from the general public.

"It is a big surprise for us that no one seems to care what [Frito-Lay brand] Doritos is going to do," Springer remarked.

Among other big names buying time this year are Coca-Cola Co.
KO, +2.70%
Kraft Foods
KFT
the Audi unit of Volkswagen, Limited Brands
LTD, +6.84%
and Hyundai.

While he is sitting on the sidelines this year, mostly because he said the stars just didn't align, Steven Schreibman of Nationwide Financial Services
NFS, +3.91%
had one of last year's hits, a spot featuring Kevin Federline, best-known as the estranged husband of Britney Spears, fantasizing about doing a music video while cooking up fries at a fast-food restaurant. That ad has passed into Super Bowl legend, largely because of the enormous publicity it generated, with free media exposure estimated at $23 million in value.

In addition, the company said the generated more than 600,000 visits to nationwide.com featured advertising page, with over 500,000 new visitors, and was viewed 832,579 times on its Website alone.

Unbelievable buzz

"In our gut, we knew we had a great concept but we really knew it was going to be larger than life when, in the middle of the shoot, we started getting calls about it," said Schreibman, the company's vice president of adverting and brand management. "In the end, we got thousands of stories, were on all the local newscasts and were in all the recaps. We were all over the blogosphere and on YouTube -- it just generated an unbelievable amount of buzz."

Schreibman noted that that alone could well have it made it worth the investment: "Half of America watches the Super Bowl but the other half doesn't and you have to reach those people as well."

That's the kind of splash that Scott Keogh, chief marketing officer of Audi of America is looking for as the German carmaker comes back to the Super Bowl for the first time since 1991. While the company is keeping the full ad under wraps, it plays off a scene from "The Godfather" in which "the old hierarchy gets tossed out in favor of the new -- in a very aggressive way," Keogh said.

He explained that the company's return was a matter of "timing, timing and timing. Audi is on a roll with a record year globally and in the States. And we have to stop Audi from being the best-kept secret" in the business.

Prime positioning should help with that: Its ad is running in the second spot during the first commercial "pod" after the kick-off.

Keogh said the company is geared up to gauge its impact via traditional measures like ad-tracking, online traffic and media coverage but "we have also planted links to the ads on a whole host of Web sites and purchased Audi keywords and "Godfather" keywords.

That is not just a smart move, but a necessary one, in any Super Bowl campaign, according to Josh Stylman, managing partner of Reprise Media, a social media and keyword tracking firm owned by Interpublic Group
IPG, +0.25%

"TV ads drive intent and intent drives people to the Web," Stylman said. "And if you think about the fact that 80% of all Internet traffic begins at search engine, that's pretty staggering."

So, for any company in the Super Bowl, "it is absolutely critical to buy keywords," he continued. Think about the economics: [A company] pays $2.7 million for a Super Bowl ad but for micro-pennies on the dollar, they can have a conversation with consumers who are literally putting their hands up to talk to them. And it bridges the gap from analog to digital."

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